Sale of Goods Act, 1930 (Pakistan)

CHAPTER II
FORMATION OF THE CONTRACT
Contract of Sale

4. Sale and agreement to sell.---(1) A contract of sale of goods is a contract

whereby the seller transfers or agrees to transfer the property in goods to the buyer
for a price. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional

(3) Where under a contract of sale the property in the goods is transferred from the
seller to the buyer, the contract is called a sale, but where the transfer of the
property in the goods is to take place at a future time or subject to some condition
thereafter to be fulfilled, the contract is called in agreement to sell.

(4) An agreement to sell becomes a sale when the time elapses or the conditions are
fulfilled subject to which the property in the goods is to be transferred.

Formalities of the Contract

5. Contract of sale how made.---(1) A contract of sale is made by an offer to buy

or sell goods for a price and the acceptance of such offer. The contract may provide
for the immediate delivery of the goods or immediate payment of the price or both,
or for the delivery or payment by instalments, or that the delivery or payment or
both shall be postponed.

(2) Subject to the provisions of any law for the time being in force a contract of sale
may be made in writing or by word of mouth, or partly in writing and party by word
of mouth or may be implied from the conduct of the parties.

Subject-matter of Contract

6. Existing or future goods.---(1) The goods which form the subject of a contract
of sale may be either existing goods, owned or possessed by the seller, or future
goods.

(2) There may be a contract for the sale of goods the acquisition of which by the
seller depends upon a contingency which may or may not happen.

(3) Where by a contract of sale the seller purports to effect a present sale of future
goods, the contract operates as an agreement to sell the goods.

7 Goods perishing before making of contract.---Where there is a contract for

the sale of specific goods, the contract is void if the goods without the knowledge of
the seller have, at the time when the contract was made, perished or become so
damaged as no longer to answer to their description in the contract.

8. Goods perishing before sale but after agreement to sell.---Where there is

an agreement to sell specific goods, and subsequently the goods without any fault on
the part of the seller or buyer perish or become so damaged as no longer to answer
to their description in the agreement before the risk passes to the buyer, the
agreement is thereby avoided.

The Price

9. Ascertainment of price.---(1) The price in a contract of sale may be fixed by the

contract or may be left to be fixed in manner thereby agreed or may be determined
by the course of dealing between the parties.

(2) Where the price is not determined in accordance with the foregoing provisions,
the buyer shall pay the seller a reasonable price. What is a reasonable price is a
question of fact dependent on the circumstances of each particular case.

10. Agreement to sell at valuation.---(1) Where there is an agreement to sell

goods on the terms that the price is to be fixed by the valuation of a third party and
such third party cannot or does not make such valuation, the agreement is thereby
avoided:

Provided that, if the goods or any part thereof have been delivered to and
appropriated by the buyer, he shall pay a reasonable price thereof.

(2) Where such third party is prevented from making the valuation by the fault of the
seller or buyer, the party not in fault may maintain a suit for damages against the
party in fault.

Conditions and Warranties

11. Stipulation as to time.--- Unless a different intention appears from the terms
of the contract, stipulations as to time of payment are not deemed to be of the
essence of a contract of sale. Whether any other stipulation as to time is of the
essence of the contract or not depends on the terms of the contract.

12. Condition and warranty.---(1) A stipulation in a contract of sale with reference

to goods which are the subject thereof may be a condition of a warranty.

(2) A condition is a stipulation essential to the main purpose of the contract, the
breach of which gives rise to a right to treat the contact as repudiated.

(3) A warranty is a stipulation collateral to the main purpose of the contract, the
breach of which gives rise to claim for damages but not to a right to reject the goods
and treat the contract as repudiated.

(4) Whether a stipulation in contract of sale is a condition or a warranty depends in

each cease on the construction of the contract. A stipulation may be a condition,
though called a warranty in the contract.

13. When condition to be treated as warranty,---(1) Where a contract of sale is

subject to any condition to be fulfilled by the seller, the buyer may waive the
condition or elect to treat the breach of the condition as a breach of warranty and
not as a ground for treating the contract as repudiated.

(2) Where a contract of sale is not severable and the buyer has accepted the goods
are part thereof 5*** the breach of any condition to be fulfilled by the seller can only
be treated as a breach of warranty and not as a ground for rejecting the goods and
treating the contract as repudiated, unless there is a term of the contract, express or
implied, to that effect.

(3) Nothing in this section shall affect the case of any condition or warranty
fulfilment of which is excused by law by reason of impossibility or otherwise.

14. Implied undertaking, as to title, etc.--- In a contract of sale, unless the

circumstances of the contract are such as to show a different intention there is---

(a) an implied condition on the part of the seller that, in the case of sale, he has a
right to sell the goods and that, in the case of an agreement to sell, he will have a
right to sell the goods at the time when the property is to pass;

5. The words and comma "or where the contract is for specific goods the property in
which has passed to the buyer," omitted by the Sale of Goods (Amendment)
Ordinance, 1962 (47 of 1962), S.3 (with effect from the 7th June, 1962).

(b) an implied warranty that the buyer shall have and enjoy quiet possession of the
goods;

(c) an implied warranty that the goods shall be free from any charge or
encumbrance in favour of any third party not declared or known to the buyer before
or at the time when the contract is made.

15. Sale by description.---Where there is a contract for the sale of goods by

description there is an implied condition that the goods shall correspond with the
description; and, if the sale is by sample as well as by description, it is not sufficient
that the bulk of the goods corresponds with the sample if the goods do not also
correspond with the description.

16. Implied conditions as to quality or fitness.--- Subject to the provisions of

this Act and of any other law for the time being in force, thee is no implied warranty
or condition as to the quality or fitness for any particular purpose of goods supplied
under a contract of sale, except as follows:-

(1) Where the buyer, expressly or by implication, makes known to the seller the
particular purpose for which the goods are required, so as to show that the buyer
relies on the seller's skill or judgment, and the goods are of a description which it is
in the course of the seller's business to supply (whether he is the manufacturer or
products or not), there is an implied condition that the goods shall be reasonably fit
for such purposes:

Provided that, in the case of a contract for the sale of a specified article under its
patent or other trade name, there is no implied condition as to its fitness for any
particular purpose

(2) Where goods are bought by description from a seller who deals in goods of that
description (whether he is the manufacturer or producer or not), there is an implied
condition that the goods shall be of merchantable quality:

Provided that, if the buyer has examined the goods, there shall be no implied
condition as regards defects which such examination ought to have revealed.

(3) An implied warranty or condition as to quality or fitness for a particular purpose

may be annexed by the usage of trade.
(4) An express warranty or condition does not negative a warranty or condition
implied by this Act unless inconsistent therewith.

[16-A. Seller to inform buyer to defect in goods sold. - Notwithstanding anything

contained in section 16, and save where the parties have entered into a agreement
to the contrary, the seller shall be under an obligation to inform the buyer of any
defect in the goods sold at the time of the contract, except in a case where the
defect the defect is obviously known to the buyer.]

17. Sale by sample.---(1) A contract of sale is a contract for sale by sample where
there is a term in the contract, express or implied, to that effect.

(2) In the case of a contract for sale by sample there is an implied condition---

(a) That the bulk shall correspond with the sample in quality;

(b) that the buyer shall have a reasonable opportunity of comparing the bulk with
the sample;

(c) that the goods shall be free from any defect, rendering them unmerchantable,
which would not be apparent on reasonable examination of the sample.